State-run Mega International Commercial Bank (兆豐銀行) yesterday said it has agreed to pay a US$29 million fine to US federal financial regulators for compliance failures at three US branches.
The banking arm of Mega Financial Holding Co (兆豐金控) attributed the latest penalty to previous breaches of US money laundering and banking secrecy laws, for which it had already paid a fine of US$180 million in 2016 to the New York State Department of Financial Services.
Those deficiencies prompted the US Federal Reserve Board to conduct inspections of Mega Bank’s branches in New York, Illinois and California, and hand down the new fine, Mega Bank president Bruce Yang (楊豊彥) told a news conference at the Taiwan Stock Exchange.
Photo: CNA
US federal authorities also required the bank to come up with measures to strengthen its money laundering oversight and controls, Yang said.
“The new fine stemmed from old breaches,” which had triggered a reshuffle of top executives and eroded much of the lender’s earnings in 2016, he said.
Mega Financial reported NT$26.62 billion (US$900.5 million) in net income for last year, or earnings per share of NT$1.96, despite higher provision and compliance costs, a bank official said by telephone.
The results suggest a double-digit percentage increase from NT$22.39 billion in profit recorded in 2016, although the final figures would soften after recognition of the new fine, which amounts to NT$857.29 million, said the official, who asked not to be named.
Mega Financial aims to book the new fines on last year’s earnings, the official said, adding: “Despite the bad news, the company managed to meet its earnings target last year.”
Mega Financial has been introducing corrective measures and upgrading its computer system, but it might take a while to get everything back on track in light of the complexity involved, Yang said.
Mega Financial denied any involvement in money laundering and apologized for its loose internal controls causing a stir in Taiwan and the US.
The bank-focused conglomerate turned conservative on lending operations following the 2016 fine, setting a mild increase of 1.5 percent to 2 percent in its loan books last year, and halting a search for acquisition opportunities at home and abroad.
The Financial Supervisory Commission said it would conduct an examination of three Mega Bank branches in the US and might issue more fines to the lender, after it slapped it with a fine of NT$10 million on Sept. 4, 2016.
The commission said it would wait and see how the US responds to Mega Bank’s progress in improving the issue before deciding whether and how much to fine the bank again.
The Executive Yuan said the US$29 million fine would not affect the Asia/Pacific Group on Money Laundering’s evaluation of Taiwan this year, which is a key indicator of the nation’s efforts to prevent money laundering in line with international standards.
Cabinet spokesman Hsu Kuo-yung (徐國勇) said the US federal system allows both federal and local governments to issue separate punishments for the same violation.
Additional reporting by Chen Wei-han and CNA
LONG FLIGHT: The jets would be flown by US pilots, with Taiwanese copilots in the two-seat F-16D variant to help familiarize them with the aircraft, the source said The US is expected to fly 10 Lockheed Martin F-16C/D Block 70/72 jets to Taiwan over the coming months to fulfill a long-awaited order of 66 aircraft, a defense official said yesterday. Word that the first batch of the jets would be delivered soon was welcome news to Taiwan, which has become concerned about delays in the delivery of US arms amid rising military tensions with China. Speaking on condition of anonymity, the official said the initial tranche of the nation’s F-16s are rolling off assembly lines in the US and would be flown under their own power to Taiwan by way
CHIP WAR: The new restrictions are expected to cut off China’s access to Taiwan’s technologies, materials and equipment essential to building AI semiconductors Taiwan has blacklisted Huawei Technologies Co (華為) and Semiconductor Manufacturing International Corp (SMIC, 中芯), dealing another major blow to the two companies spearheading China’s efforts to develop cutting-edge artificial intelligence (AI) chip technologies. The Ministry of Economic Affairs’ International Trade Administration has included Huawei, SMIC and several of their subsidiaries in an update of its so-called strategic high-tech commodities entity list, the latest version on its Web site showed on Saturday. It did not publicly announce the change. Other entities on the list include organizations such as the Taliban and al-Qaeda, as well as companies in China, Iran and elsewhere. Local companies need
CRITICISM: It is generally accepted that the Straits Forum is a CCP ‘united front’ platform, and anyone attending should maintain Taiwan’s dignity, the council said The Mainland Affairs Council (MAC) yesterday said it deeply regrets that former president Ma Ying-jeou (馬英九) echoed the Chinese Communist Party’s (CCP) “one China” principle and “united front” tactics by telling the Straits Forum that Taiwanese yearn for both sides of the Taiwan Strait to move toward “peace” and “integration.” The 17th annual Straits Forum yesterday opened in Xiamen, China, and while the Chinese Nationalist Party’s (KMT) local government heads were absent for the first time in 17 years, Ma attended the forum as “former KMT chairperson” and met with Chinese People’s Political Consultative Conference Chairman Wang Huning (王滬寧). Wang
CROSS-STRAIT: The MAC said it barred the Chinese officials from attending an event, because they failed to provide guarantees that Taiwan would be treated with respect The Mainland Affairs Council (MAC) on Friday night defended its decision to bar Chinese officials and tourism representatives from attending a tourism event in Taipei next month, citing the unsafe conditions for Taiwanese in China. The Taipei International Summer Travel Expo, organized by the Taiwan Tourism Exchange Association, is to run from July 18 to 21. China’s Taiwan Affairs Office spokeswoman Zhu Fenglian (朱鳳蓮) on Friday said that representatives from China’s travel industry were excluded from the expo. The Democratic Progressive Party government is obstructing cross-strait tourism exchange in a vain attempt to ignore the mainstream support for peaceful development
RSS